Is AARP Term Life Insurance Right for Me?
If you are a senior and an AARP member, you may be looking for a life insurance option that suits your needs and budget. Life insurance can provide financial protection and peace of mind for you and your loved ones, especially if you have debts, medical expenses, or funeral costs to cover. However, finding the right life insurance policy can be challenging, as you may face higher premiums, lower coverage limits, or stricter eligibility requirements due to your age or health.
One of the options you might be considering is AARP Term Life Insurance from New York Life. This is a product that offers term life insurance coverage to AARP members aged 50 to 74 and their spouses aged 45 to 74, without requiring a medical exam or health questions. The coverage amount ranges from $10,000 to $150,000, depending on the state and the age of the applicant. The policy lasts until the insured reaches age 80, and the premiums increase every five years based on the age group.
But how do you know if this product is right for you? In this article, we will review some of the pros and cons of AARP Term Life Insurance, as well as some customer feedback and ratings from various sources. We will also compare it to other life insurance options available to seniors, and help you decide if this product meets your needs and goals.
Pros and Cons of AARP Term Life Insurance
AARP Term Life Insurance has some advantages and disadvantages that you should be aware of before buying the policy. Here are some of them:
Pros:
- No medical exam or health questions required: This means that you can apply and get approved for the policy online, without having to undergo a physical exam or answer any health-related questions. This can save you time and hassle, as well as increase your chances of getting coverage, even if you have some pre-existing conditions or health issues.
- Easy and convenient online application and purchase: You can get a quote, fill out an application, and submit it on the AARP website, without having to visit an office or talk to an agent. The approval process is also fast and simple, and you can receive your policy documents electronically or by mail.
- High financial strength and reputation of New York Life: New York Life is one of the largest and most reputable life insurance companies in the US, with a long history of financial strength and stability. It has received the highest ratings from the major rating agencies, such as A.M. Best, Standard & Poor’s, Moody’s, and Fitch. These ratings indicate the company’s ability to meet its obligations and pay claims to its policyholders.
- Final expense insurance available: If you are looking for a smaller coverage amount to cover your final expenses, such as funeral costs, medical bills, or debts, you can opt for the AARP Level Benefit Term Life Insurance. This policy offers coverage amounts from $10,000 to $50,000, depending on the state and the age of the applicant. The premiums are level and guaranteed not to increase for the life of the policy, and the coverage lasts until the insured reaches age 80.
Cons:
- Low coverage limits: AARP Term Life Insurance has low coverage limits of $150,000 for most states and $100,000 for Montana and New York. This may not be enough to meet your financial needs and goals, especially if you have large debts, mortgages, or dependents. You may need higher coverage amounts to replace your income, pay off your debts, or leave a legacy for your family. If you want higher coverage amounts, you may need to look for other options or buy multiple policies.
- Increasing premiums: AARP Term Life Insurance has premiums that increase every five years based on the age group of the insured. This means that the cost of the policy will rise significantly over time, and may become unaffordable for some customers, especially those on a fixed income or a tight budget. You may end up paying more than the coverage is worth, or canceling the policy before it expires. If you want level premiums that stay the same throughout the term, you may need to look for other options or switch to a different policy.
- No conversion option: AARP Term Life Insurance does not offer a conversion option, which allows you to convert your term policy into a permanent policy without having to reapply or take a medical exam. This means that if you want to extend your coverage beyond age 80 or build cash value, you may need to look for other options or buy a new policy. However, you may face higher premiums, lower coverage limits, or stricter eligibility requirements due to your age or health.
How Does AARP Term Life Insurance Compare to Other Options?
To help you decide if AARP Term Life Insurance is right for you, you should compare it to other life insurance options available to seniors. Here are some of the most common ones:
- Traditional term life insurance: This is a type of life insurance that provides coverage for a specific period of time, usually 10, 15, 20, or 30 years. The premiums are usually level and guaranteed not to increase for the duration of the term, and the coverage amount is usually higher than AARP Term Life Insurance. However, you may need to take a medical exam or answer health questions to qualify for the policy, and you may face higher premiums or lower coverage limits due to your age or health. You may also lose your coverage if you outlive the term, unless you have a conversion option or renew the policy.
- Guaranteed issue life insurance: This is a type of life insurance that does not require a medical exam or health questions to qualify for the policy. You are guaranteed to be accepted, regardless of your age or health. However, the coverage amount is usually low, ranging from $5,000 to $25,000, and the premiums are usually high, compared to other types of life insurance. You may also have a graded death benefit, which means that the full coverage amount is not paid out if you die within the first two or three years of the policy, unless you die from an accident.
- Permanent life insurance: This is a type of life insurance that provides coverage for your entire life, as long as you pay the premiums. It also builds cash value, which is a savings component that grows over time and can be accessed through loans or withdrawals. However, the premiums are usually much higher than term life insurance, and the coverage amount is usually lower than traditional term life insurance. You may also need to take a medical exam or answer health questions to qualify for the policy, and you may face higher premiums or lower coverage limits due to your age or health.
Here is a table that compares the coverage amounts and premiums of AARP Term Life Insurance with other life insurance options for seniors, based on a 65-year-old male non-smoker in good health:
| Product | Coverage Amount | Premium |
|---|---|---|
| AARP Term Life Insurance | $150,000 | $245.50 per month |
| Traditional Term Life Insurance (20 years) | $250,000 | $200.00 per month |
| Guaranteed Issue Life Insurance | $25,000 | $150.00 per month |
| Permanent Life Insurance | $100,000 | $300.00 per month |
As you can see, AARP Term Life Insurance has lower coverage limits and higher premiums than traditional term life insurance, but higher coverage limits and lower premiums than guaranteed issue life insurance or permanent life insurance. However, these are just estimates, and the actual coverage amounts and premiums may vary depending on the state, the age, the health, and the provider of the policy.
Is AARP Term Life Insurance Right for Me?
Ultimately, the answer to this question depends on your personal needs, goals, and budget. AARP Term Life Insurance may be a good option for you if:
- You are an AARP member or a spouse of an AARP member
- You are looking for a simple and convenient way to buy life insurance online, without a medical exam or health questions
- You are looking for a moderate coverage amount to cover your final expenses, debts, or medical bills
- You are comfortable with increasing premiums every five years and expiring coverage at age 80
- You trust the financial strength and reputation of New York Life
However, AARP Term Life Insurance may not be the best option for you if:
- You are not an AARP member or a spouse of an AARP member
- You are looking for a higher coverage amount to replace your income, pay off your mortgage, or leave a legacy for your family
- You are looking for level premiums that stay the same throughout the term or a conversion option to extend your coverage or build cash value
- You are looking for a lower cost or a more flexible policy that suits your changing needs and goals
- You are not satisfied with the customer service or communication from New York Life
What Should I Do Next?
If you are interested in AARP Term Life Insurance or want to learn more about it, you can visit the AARP website or contact . You can also request a free quote online and see how much coverage you can get and how much it will cost you.
However, before you make a decision, you should also compare AARP Term Life Insurance with other life insurance options available to seniors. You can use online tools or calculators to compare different policies and providers, or consult with a licensed and independent agent or advisor who can help you find the best policy for your needs and goals.
I hope this article has helped you to understand AARP Term Life Insurance better and decide if it is right for you. If you have any questions or need more assistance, please let me know. I’m happy to help.
"This article is for informational purposes only and should not be considered financial advice. Please consult with a qualified financial professional before making any insurance decisions"
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